Gillard reaches agreement with NSW on disability scheme funding

The federal and New South Wales governments have reached an agreement about how to fund the National Disability Insurance Scheme, with each agreeing to pay for the scheme, 50-50.

Prime Minister Julia Gillard told reporters in Canberra on Thursday that NSW had been the first state to reach an agreement on how to support the NDIS in the long-term.

''What it means is the Commonwealth and the state will share around half of the burden,'' she said.

The announcement comes ahead of tomorrow's Council of Australian Government meeting where the NDIS is expected to be discussed, along with electricity prices and green tape.

Ms Gillard said that when the full scheme is up and running in 2018, the federal government would pay 51.4 per cent of the costs at $3.319 billion. The NSW government will pick up the remaining costs, putting in $3.133 billion.

"I do want to reinforce that this deal now sets the benchmark,'' Ms Gillard said, later noting that other states and territories would not be getting a better deal.

NSW Premier Barry O'Farrell said the deal was not just fair but necessary for people with disabilities and their carers.

"This gives them the guarantee they've always deserved,'' he said on Thursday.

Following the last COAG meeting in August, NSW and the federal government agreed upon a trial site for the NDIS in the Hunter Region.